PROTOCOL AMENDING THE CONVENTION BETWEEN INDIA, UK
AND THE NORTHERN IRELAND SIGNED FOR THE AVOIDANCE OF DOUBLE TAXATION AND
THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND
CAPITAL GAINS
PRESS release, dated 1-11-2012
India and UK signed a Protocol amending the Convention
between the Government of the Republic of India and the Government of
the United Kingdom of Great Britain and Northern Ireland for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect of Taxes on Income and Capital Gains (DTAC). This Protocol
amends the earlier Convention that was assigned in New Delhi on 25th
January, 1993. The Protocol was signed on 30th October 2012 in London by
Dr Jaimini Bhagwati, High Commissioner of India to the UK on behalf of
the Government of India and Mr David Gauke MP, Exchequer Secretary to
the Treasury on behalf of the Government of UK.
The Protocol streamlines the provisions relating to
partnership and taxation of dividends in both the countries. Now,
benefits of the Convention would also be available to partners of the UK
partnerships to the extent income of UK partnership are taxed in their
hands. Further, the withholding taxes on the dividends would be 10% or
15% and would be equally applicable in UK and in India.
The Protocol incorporates in the Convention provisions for
effective exchange of information between tax authorities of the two
countries in line with latest international standards including exchange
of banking information and supplying of information irrespective of
domestic interest. It now also provides for sharing of information to
other agencies with the consent of the supplying state.
There would now be a new article in the Convention on
assistance in collection of taxes. This article also includes provision
for taking measures of conservancy. The Protocol also incorporates into
the Convention anti-abuse (limitation of benefits) provisions to ensure
that the benefits of the Convention are not misused. Both the countries
would further enter into MOUs to expedite exchange of information and
assistance in collection of taxes.
The Convention, as amended by this Protocol, will provide
tax stability to the residents of India and U.K. and will facilitate
mutual economic cooperation between the two countries. It will also
stimulate the flow of investment, technology and services between India
and U.K.
